3BL Strategy(Triple Bottom Line)

With Triple Bottom Line Management, the maximum level of economic business performance is achieved when an equilibrium of stakeholders’ interest is found.

In order to satisfy the stakeholders, the equilibrium of interest becomes a set of non-negotiable goals with economic, social and environmental strategies.

The search for an equilibrium requires a shift in the business executives’ perceptions. The known consequences of employing single bottom line strategies will give rise to further conditions and intensity of social challenges that the companies will face.

To accelerate the shift, En-Sync 8020 employs a set of accelerated learning steps for 3BL Strategy Development.

Triple Bottom Line Management

Triple Bottom Line Management is a framework that expands a company’s accountability from shareholder value to a broader stakeholder value, from the old definition of the purpose of a corporation
to a new definition
Economic Bottom Line with
the Old purpose of corporation
Shareholder Focus
Triple Bottom Line with the
new purpose of corporation
Stakeholder Focus
An individual or institution that legally owns one
or more shares of stock
Anyone who is influenced, either directly or
indirectly, by the actions of the company
“The paramount duty of management and of boards of directors is to the corporation’s stockholders. The interests of other stakeholders are relevant as a derivative of the duty
to stockholders.”
Published by the Business Roundtable, Aug. 19, 2019
“…Creating value for customers, investing in employees, fostering diversity and inclusion, dealing fairly and ethically with suppliers, supporting the communities in which we work, protecting the environment…”
all before ever mentioning “shareholders,” which
does not happen until the last paragraph.

Social Power of Stakeholder

Ongoing transformation of the modern society, increases the social power of stakeholders as holders for social and environmental licenses to operate the businesses.

Social power of the stakeholders is the capacity of stakeholders to influence the conduct (behaviour) of other stakeholders and businesses.

Employees
Communities
Local & Federal Governments
Trade Unions
Non- Governmental Organisations
Political Parties

Challenges for Triple Bottom Line

Modern companies are under ever-increasing pressures and challenges to be overcome and deliver Triple Bottom Line results. Some of the most critical challenges highlighted by Senior Business Executives interviewed by En-Sync 8020:

Social

Economic

Environmental

Bottom Line
  • Growth in governments’ regulations and involvement
  • Increasing social power of employees and communities
  • Increased social mobility
  • Slow pace of changes in educational systems
  • Growth of social media
Bottom Line
  • Growth of economic nationalism
  • Increase in market volatility
  • Undergoing value chain transformations (for example, digital transformation)
  • Rise in consumer influence
Bottom Line
  • Time for circular economy is approaching fast
  • Tougher environmental regulations
  • Increased environmental awareness

Economic Bottom Line Strategy

A failure to recognise an increase in the social power of stakeholders and the continuation with shareholder value, as a driver for strategy development, can lead to a loss of social and environmental licenses to operate. This can be despite huge successes in business improvement and operational effectiveness.
The story below is of a company, that went from dust to glory and back to dust in 5 years, as a result of its 5-year strategy, described as “Driver cashflow up at any cost.”.
2013
Economic
Bottom Line
Transformation
2016
2017
2019
Share price:
96 GBp
Share price:
500 GBp
Share price:
573 GBp
Share price:
174 GBp
Share price:
93 GBp
  • Drastic decrease in product prices
  • Inflated cost of operations
  • Non-delivery on operational targets for last 3 years
  • Decrease in share price and market capitalisation
  • Environmental and Lawsuits
  • Parent company’s desire to sell asset
  • Failed Merger & Acquisition Attempt
  • High management turnover
  • Projects’ overrun
  • New CEO and COO
  • New 5 year strategy
  • New name of the company
  • Business Improvement initiatives
  • Improve labour productivity 31%
  • Reduce personnel 18%
  • Meeting and exceeding production plans for the first time
  • Increased planned maintenance from 35% to 55%
  • Decreased AISC 18%
  • Increased production 13%
  • Reduced capital cost 34%
  • Improved operating cash flow 55%
Seekingalpha.com:
  • Company has turned free cash flow positive and has finally presented its vision for the mid-term future.
  • We are convinced that a turnaround has been accomplished and we are expecting significant growth going forward even at today’s product price levels.
  • Management has succeeded on just about the most difficult task available in the industry. We are confident that it will deliver on its 5 year plan.
  • Company remains severely undervalued and should re-rate over time to account for its successful reinvention.”
  • High Hopes for Management Buyout
  • Trade Unions and Communities ongoing complaints to the government
  • Multi-billion penalties and fines
  • Some assets / plants are closed to keep the company profitable
  • Request by the government for multi-million one-off payment as a gesture of good will
  • Request by the government to have a share in the company
  • CEO, COO and CFO left
  • Sell off of the assets to keep the company alive
  • The last asset is closed under order from the government for environmental concerns
  • “Company lost the social license to operate” as described by the parent company
  • Buyout by the parent company
  • Company of 2013 stopped to exist

Triple Bottom Line Strategy

3BL Strategy Development is to find a strategic equilibrium of stakeholders’ interests and objectives, that secures social and environmental licenses to operate. It also maximises an economic performance of the business, through an achievement of cooperation and support among stakeholders.
Stakeholders
Interests
Equilibrium of
Non-Negotiable Goals
Triple Bottom Line
Strategy
  • Employees
  • Local and Federal Governments
  • Communities
  • Political Parties
  • Growth of social media
  • Unions
  • NGOs

Motives of stakeholders and their expectations on the relationship with the business

Three types of interests:
  • economic
  • social
  • environmental
 

Frequently, the interests of stakeholders are mutually
exclusive — As a result, the overall business performance suffers

The situation when the interests of the stakeholders are still met and the business performance / economic bottom line is maximised

Satisfied interests of stakeholders and maximised business
performance become non-negotiable goals as a foundation for strategy development

Three types of non-negotiable goals:
  • economic
  • social
  • environmental
Triple bottom line strategy of a company is an integration of three types of strategy:
  • economic
  • social
  • environmental
 
Every type of strategy has sequenced tasks to be performed at various complexity levels and key measures to be impacted:
  • net income
  • social license to operate
  • environmental license to operate

3BL Accelerated Learning & Development

As businesses move from a primary single economic bottom line perspective and start to include equally social & environmental perspectives, the impact of positive results for management and employees will become evident over time.

Those Executives who learn quickly how to amplify the importance and benefits of triple bottom line management and strategy, will reap the rewards of success.
En-Sync 8020 has developed an approach and its objective is to accelerate the learning of the company’s executives and employees on the importance and benefits of Triple Bottom Line Management and strategy.
Aware
Disrupt & Learn
Link
Organise
Behave
Existing misbalance in triple botom line management
Simulated non-negotiable goals / interests
of stakeholders
Cascading of non-negotiable goals into economic, social and environment strategies
Capability to deliver the strategies (systems, structure and people)
Positive intention of stakeholders to support the strategies and comply with required behaviours
Expose the misbalances in the current business strategy by conducting an assessment of existing strategic objectives and strategies in relation to economic, social and environmental bottom lines
Simulate various equilibriums of stakeholders’ interests and impact on business performance to identify non-negotiable goals for every business stakeholder and allow the executives to learn the consequences
Link non-negotiable goals of stakeholders into
3 types of strategies to achieve these goals (economic, social and environment) with requisite milestones, clearly articulated tasks and expected outputs
Ensure the strategies are supported with mature organisational systems, accountabilities for the strategies and tasks are allocated to roles at the right level of complexity and role holders with the right level of capability
Identify the factors that negatively impact intention of social license holders to support the economic, social, and environmental strategies and continuously monitor in real time the changes in the intention to support

Accelerated Learning Technology

En-Sync 8020 utilises a combination of accelerated learning, dynamic factor modelling, economic, social and environmental value drivers. This allows designed trials with accelerated active learning, where errors can be made in a safe, simulated environment, which aid the disruption of old perceptions and ideas about the single economic bottom line strategy.
3BL Accelerated Learning & Development allows the executives of the companies to see the consequences of ignoring the 3BL equilibrium today, and in the future, and learn about the benefits of changing their perceptions and behaviours about the triple bottom line management.
Are you interested to find out:
  • How lopsided is your current strategy?
  • Who are your company’s stakeholders?
  • What’s an equilibrium of their interests, that allows them to maximise the economic business performance?
  • What is your 3BL strategy to achieve and maintain the equilibrium of stakeholders’ interests?
  • How capable is your organisation to in achieving and delivering on your 3BL strategy?
  • Does your company have a 3BL culture?
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